Finance scandal: City of Miami never learns

Finance c’tee readies NIS 400b. budget for Knesset approval

In late 1996, as pro bono city manager of Miami, we uncovered a $68 million shortfall in a recommended, once approved 1996/97 city budget. As illegal as that was, I felt that the citys December 1995 $73 million revenue bond issue for the pension system, which seriously understated the citys poor financial condition, was even more egregious. Some of the proceeds ($25 million) from that bond issue were posted in the 1994/95 budget after (!) the fiscal year ended, and $35 million more was recorded as pension revenue in the then current 1995/96 budget. There were few bond funds left, yet another $35 million in revenue was shown in the proposed budget, an early indication that the proposed budget was based on smoke and mirrors. Afterwards, the actual budget deficit rose very quickly to $68 million and we were forced to totally reconstruct the proposed budget.

There are ethical questions to consider, which makes it seem like there is indeed morality in personal finance. Money-related issues go beyond a cost-benefit analysis. We have to ask ourselves, is this hurting anyone? Does it hurt the system when you choose not to pay off your credit cards or take on a loan you can’t afford? I think these are moral questions worth asking.

Is There Morality in Personal Finance?

Hundred Dollar Bills Cash Money Currency

Earlier in the day, the committee approved cuts of a half-billion shekels a year from the planned budget increases for both the Education Ministry and the Transportation Ministry. On Sunday, the cabinet approved a 4 percent reduction in ministry budgets , excluding education, transportation, defense and welfare. The committee also specified that the government could employ no more than 73,619 people in 2013 and 74,273 in 2014. The committee increased property tax to 6% from 5%, which was agreed to in principle in earlier discussions, and lowered the maximum tax exemptions on the lottery to NIS 50 million, which is expected to net the government some NIS 10m. a year.

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